What does Macquarie think Qantas shares are worth?

Let's see if the broker believes the Flying Kangaroo's shares can keep rising.

Qantas Airways Ltd (ASX: QAN) shares are charging higher on Thursday.

In morning trade, the airline operator's shares are up 5% to $11.02.

This means that the Flying Kangaroo's shares are now up almost 80% since this time last year.

Can its shares keep rising? Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the airline.

A pilot stands in an empty passenger cabin smiling with his arms crossed looking excited

Image source: Getty Images

What is being said about Qantas and its shares?

Macquarie notes that Qantas has announced the imminent closure of its Jetstar Asia (JSA) business. It is supportive of the move and believes it will boost the company's earnings in FY 2027. It said:

JSA's closure reflects rising lease costs, a step change in costs (airport, fuel access), and inability to lift the yield. Path to an ROIC of +10% would be arduous, and QAN had an alternative use, namely replacing leases and older fleet and incrementally growing the business. We estimate the EBIT swing is ~$46m with the gain coming principally in FY27E.

In addition, Macquarie highlights that there was an update on its capacity guidance for the first quarter of FY 2026 with yesterday's release. It said:

QAN updated 1Q26 guidance, albeit booking engines suggest FY26: Domestic growth is 5-6%, with JS and QFlink driving growth, the lower cost operations in QANTAS. Internationally, JS is ~10% in 1H26 slowing to 3% in 2H, and QF is ~6% in 1H26 growing to 10% in 2H26. Much of the latter is coming from the US, where competitors are also lifting volumes.

We anticipate the ongoing fall in the oil price and crack spread should mitigate some of the international RASK pressure. Domestically, given the benign market, QAN should capture much of the gain, especially in the main brand.

What are its shares worth?

Unfortunately, the broker believes that Qantas shares are fully valued at current levels and have reached a peak for at least the time being.

The note reveals that Macquarie has reaffirmed its neutral rating on the company's shares with an improved price target of $10.10. This is around 8% below where they are trading at the time of writing.

Though, the broker is forecasting fully franked dividend yields of approximately 5% for FY 2025, FY 2026, and FY 2027. This limits the potential negative return to approximately 3% over the next 12 months.

Commenting on its neutral rating, Macquarie said:

Neutral. FY25 outlook is still strong. LFs are nearing record highs, leaving less leverage. We remain cautious on International given competitive capacity on Europe and US in FY26. EV/EBITDA multiple is at a 10-year peak (ex-COVID), which captures the structural changes to the cost base.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Travel Shares

Sell written several times on board.
Broker Notes

Sell alert! Expert calls time on Corporate Travel and CBA shares

A leading expert expects CBA and Corporate Travel shares to face significant headwinds.

Read more »

Smiling woman taking a video through a plane window with her phone.
Travel Shares

Qantas Airways vs Flight Centre: Which ASX travel stock is the better buy today?

I compare Qantas and Flight Centre on dividends, value, size, and performance to decide which ASX travel stock looks better…

Read more »

Woman looking through an airplane window while holding a book.
Travel Shares

Which ASX travel stock does Morgans tip to jump 60%?

A new acquisition could be a boost for this company.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Qantas shares are climbing higher again! Time to buy?

Find out where brokers think the share price will travel to next.

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Dividend Investing

$10,000 invested in Air New Zealand and Qantas shares 3 years ago is now worth…

Here’s how the three-year returns from Qantas and Air New Zealand shares compare.

Read more »

Happy couple looking at a phone and waiting for their flight at an airport.
Travel Shares

Why I'd invest $10,000 into Qantas shares today

I think the current valuation gives investors more room to absorb some of the risks that come with owning an…

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Dividend Investing

Looking to bank the final Qantas dividend? You'd better hurry!

Here’s what you need to know to bank the final Qantas dividend.

Read more »

A smiling woman in a hat holding a ticket takes selfie inside a Qantas plane next to the window.
Dividend Investing

How many Qantas shares do I need to buy for $5,000 of passive income in FY27?

Suspended during the global pandemic, Qantas shares resumed paying dividends in 2025.

Read more »